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[2021] ZAWCHC 173
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Super Group Trading (Pty) Ltd t/a Super Rent v Bauer and Another (4001/2020) [2021] ZAWCHC 173; 2022 (5) SA 622 (WCC) (2 September 2021)
IN
THE HIGH COURT OF SOUTH AFRICA
WESTERN CAPE DIVISION, CAPE TOWN
Case number: 4001/2020
Before: The Hon. Mr Justice Binns-Ward
Hearing: 27 July 2021
Judgment:
2 September 2021
In the
matter between:
SUPER
GROUP TRADING (PTY) LTD
t/a
SUPER
RENT
Plaintiff
and
WARREN
BAUER
First
Defendant
HAVENLU
BELEGGINGS CC
t/a
E & R
MOTORS
Second
Defendant
JUDGMENT
(Delivered by email to the parties and release to SAFLII.)
BINNS-WARD J:
[1]
This matter concerns an exception by the
second defendant to the plaintiff’s particulars of claim.
[1]
[2]
It is convenient to begin by summarising
the import of the plaintiff’s claims insofar as they may be
discerned from the particulars
of claim, which are far from a model
of lucidity.
[3]
The plaintiff is a company. The
nature of its business is not pleaded, but it may be inferred from
the pleaded allegations
that it owns a fleet of vehicles, or at least
did so at the time material to its claim. The first defendant
is a former employee
of the plaintiff. It is alleged that he
was employed as a regional branch manager and that his
responsibilities included
‘
the
management as well as administration and the controlling of the
purchase and sale of petroleum products from the second defendant
and
other resellers to the plaintiff’s vehicles
’.
[4]
It is alleged in para 2.2. of the
particulars of claim that the second defendant close corporation
‘
trades as a duly licensed
retailer/reseller of petroleum products, and provided petroleum
products and particularly diesel and petrol
to the plaintiff’s
vehicles to transport goods on behalf of the plaintiff’s
customers in the normal course of the plaintiff’s
business
’.
The pleading proceeds regarding the second defendant as follows in
para 4:
‘
4.
THE SECOND DEFENDANT
4.1 The plaintiff, represented by
the first defendant, utilised the services of the second
defendant
for the purposes aforesaid. The second defendant:
4.1.1 knew that as a reseller of petroleum
products, it was only entitled to provide the plaintiff’s
vehicles
with petroleum products and nothing more, and that payment
would be made by means of the account held at the second defendant,
or the use of the credit card facility aforesaid;
4.1.2 knew, that all petroleum products had to be
purchased by means of,
inter alia
, clearance through the
ordinary settlement process of the banking system, which include cash
as defined in the Petroleum Products
Act and the Regulations
promulgated thereunder;
4.1.3 represented to the plaintiff that in relation
to the supply of petrol or petroleum products, it operated
a fuel
station and, was entitled to obtain petroleum products from a
wholesale distributor in order to sell such product in the
course of
the business carried on by it, to the plaintiff, represented as
aforesaid;
4.1.4 was aware thereof that it was not entitled to
demand any additional payment from the plaintiff other than
the price
at which it, as a reseller of petroleum products, normally sells
petrol or petroleum products;
4.1.5 knew, that it was required to comply with its
obligations by supplying petrol or diesel oil or petroleum
products
into the tank of the plaintiff’s vehicles against payment in
cash as defined.
4.1.6 Any request to perform any function other
than the supply of petroleum or petroleum products had to be
authorised by the first defendant, subsequent to him obtaining and
providing a written authorisation letter from the plaintiff's
regional financial office supported by a resolution duly signed by
the authorised signatories of the plaintiff, and presenting
same to
the second defendant.’
[5]
Subparagraph 5.1 of the particulars of
claim is set out under the subheading ‘
THE
MODUS OPERANDI
’. It
comprises several subparagraphs, only some of which contain
allegations related to the second defendant. The
others seem to
pertain only to the claim against the first defendant. That
part that relates to the second defendant goes
as follows:
‘
5.1 Over the
period February 2014 to October 2019 and without the plaintiff’s
knowledge and/or
consent:
5.1.1 the first defendant misappropriated an amount
of R1 635 306.65 with the assistance of the second
defendant who fraudulently submitted false fuel and oil claims, which
amounts were not for petroleum products but cash amounts
paid by the
second defendant to the first defendant;
5.1.2 the second defendant benefitted from the
unsolicited and unlawful payments under circumstances, where the
second defendant did not provide fuel and/or diesel oil to the
plaintiff’s vehicles, but submitted fuel invoices to the
plaintiff’s regional financial office for payment, in
circumstances where it paid cash amounts to the first defendant, at
his special instance and request, and the second defendant submitted
normal standardised petroleum invoices reflecting the purchase
and
sale of petroleum products to the plaintiff;
5.1.3 the second defendant knew that, by virtue of
its relationship with the plaintiff, as well as relevant legislation,
it could not hand out any cash amounts to the first defendant, and
that it was not entitled to submit invoices to the plaintiff
that
created the false impression that the second defendant provided fuel
directly into the plaintiff’s vehicles’ tanks;
5.1.4 ...
5.5 ..., by utilising the
plaintiff’s First National Bank credit card the first defendant
caused vehicles that do not belong to the plaintiff to be filled up
with petroleum products, and the first defendant caused amounts
totalling R205 787.89 to be claimed on behalf of the second
defendant from the plaintiff’s regional financial office,
which
amounts the plaintiff transferred to the second defendant in the
bona
fide
belief that the amounts claimed were going to the second
defendant for providing petroleum products directly into the tanks of
the plaintiff’s vehicles;
5.1.6
...
5.1.7 [This subparagraph refers to various
summaries that were attached to the pleading as annexures PC1, PC2
and PC3, respectively.
Annexure PC1 relates to the cash paid to the first defendant ‘
on
the strength of the plaintiff’s fuel purchase orders over the
period January 2015 to October 2019
’. Reference to
annexure PC1 shows that the amounts totalling R1 635 306.65
in respect of so-called ‘
fraudulent transactions
’
that are summarised there were derived from ‘
E&R
Statements of account
’. As E&R Motors is alleged
to be the second defendant’s trading name, one may deduce that
the allegedly fraudulent
transactions related to statements sent by
the second defendant ostensibly in respect of the sale of fuel to the
plaintiff that
are alleged instead to have in fact been related to
cash payments made by the second defendant to the first defendant.
Annexure PC2 is ‘
a summary of unauthorised and unlawful
credit card transactions performed at the second defendant over the
period 25 February 2014
to 4 September 2019, in that the
second defendant supplied petrol or diesel oil into the tanks of
vehicles not belonging to the
plaintiff
’. If one does
the arithmetic, the amounts allegedly involved as listed in PC2 add
up to R205 787,89 (the amount
referred to in para 5.5 quoted
above).
Annexure PC3 is a summary similar to that in PC2 but in respect of
fuel supplied to vehicles not belonging to the plaintiff ‘
at
various other resellers of fuel and fuel products over the period 6
August 2012 to 22 September 2019
’. Annexure PC3
therefore does not pertain to the claim against the second
defendant. There is no claim in the
action against the ‘various
other resellers’.]
5.1.8 The plaintiff paid the aforesaid amounts in
the
bona fide
but mistaken belief that the amounts were owing
to the second defendant and to the various other suppliers.
5.1.9 [This subparagraph serves to introduce, as
annexure PC4, a copy of an invoice and ‘
fuel/oil issue
’
document. The invoice, which is dated ‘04-08-15’,
appears to have been issued by the second defendant
to the plaintiff
in the amount of R1887,45. It is made out to the plaintiff’s
trading name ‘Super Rent’
identified on the document as
‘
Client
’. It purports to be in respect of
the supply of ‘
...Lit...Petrol/Diesel
’, that is no
quantity is indicated of fuel supplied. No particulars are
inserted in the space provided in the proforma
document for ‘
Car
Reg No: Motor Reg Nr:
’. The pleading does not
explain the nature of the ‘
Fuel/Oil Issue
’
document. It appears to be a document used in the plaintiff’s
administration because it is under a header with
the plaintiff’s
name and particulars. It is also dated 04-08-2015 and bears
what appears to be a serial number, viz.
174381. The document
provides for a variety of information to be filled in, viz. ‘time’,
‘vehicle registration
no.’, rental agreement no., ‘close
meter’, ‘open meter’, ‘mileage’,
‘litres’
(presumably petrol or diesel), ‘oil’,
‘driver’s signature’, ‘driver’s name’,
‘attendant’s
signature’ and ‘customer’.
None of that information has been filled in on the ‘Fuel/Oil
Issue’
document included as part of annexure PC4 to the
pleading. Apart from the date, it reflects only the amount of
R1887.45.
The document is endorsed with the word ‘
CASH
’
in capital letters. The pleading does not indicate the
circumstances in which or by whom the endorsement was made.
Both the invoice and ‘
Fuel/Oil Issue
’ document to
which it apparently relates bear a scribbled initial, which the
pleader has alleged is the signature of the
first defendant.]
5.1.10 ...
5.1.11 ...
5.1.12 ...
[6]
Subparagraph 5.2 of the particulars of
claim proceeds as follows under the subheading ‘
THE
SECOND DEFENDANT’S DUTIES
’
:
At all times
material hereto:
5.2.1 a fiduciary as well as a statutory duty that
derived from the
Petroleum Products Act 120 of 1977
as well as the
regulations promulgated thereunder, vested in the second defendant,
and in this regard:
5.2.2.1 not to submit false fuel and oil claims facilitating the
fraud and theft committed by the first defendant as an employee
of
the plaintiff;
5.2.1.2 not to submit claims, representing that fuel had been
provided to the plaintiff’s vehicles under circumstances, where
the second defendant handed cash amounts to the first defendant and,
thereafter, submitted an invoice to the plaintiff claiming
amounts
for petroleum or petroleum products, based upon a standardised
petroleum invoice, signed by the first defendant;
5.2.1.3 the second defendant knew that the registration number as
well as other detail have to be included upon all ‘fuel/oil
issue’ documents in order to ensure that it would be entitled
to claim all amounts from the plaintiff;
5.2.2 in providing a fuel invoice to the plaintiff,
duly signed by the first defendant, the second defendant
represented
to the plaintiff that it, as a reseller of petroleum and petroleum
products, supplied petrol or petroleum products
into the tank of a
petrol or diesel oil driven vehicle belonging to the plaintiff, and
that it was entitled to payment in cash
as provided for in the Act;
5.2.3 the second defendant at all times, had a duty
to inquire from the plaintiff and to establish whether it
was
entitled to pay cash amounts to the first defendant and, to issue
invoices to the plaintiff upon a document similar to any
petroleum
invoice and issue note, as if it supplied petroleum products directly
into the tank of the plaintiff’s vehicles;
5.2.4 in acting as aforesaid, the second defendant
facilitated the fraud and theft committed by the first defendant
and
acted as a co-perpetrator and conspired against the plaintiff in
submitting false invoices and issue notes to the plaintiff
in respect
of the supply of petroleum products.
[7]
The exception is taken on two grounds.
[8]
The first is predicated on the assumption
that the claim against the second defendant has been brought in
delict on the basis of
vicarious liability. The notice of
exception states that the ‘
Second
Defendant is a juristic person and is only capable of performing an
act or omission through its directors, members and/or
employees
’.
The notice proceeds to set out the matters that require to be pleaded
to support a claim based on vicarious liability,
viz. that the person
who committed the delict was an employee of the defendant, the scope
of the employee’s duties at the
relevant time and that the
delict was committed by the employee acting within the course and
scope of his/her employment.
It points out that the particulars
of claim do not make any such allegations and contends that the
pleading therefore ‘
lack
[s]
averments necessary to sustain a cause
of action, alternatively,
[is]
vague
and embarrassing
’.
[9]
The plaintiff’s counsel argued that
the notion that a company could only attract liability vicariously,
as he quite reasonably
understood the first ground of exception to
imply, was fallacious. He supported his submissions in this
regard with reference
to the judgment of Gamble J in
Groenewald
v Irvin & Johnson Limited and Others
[2017] ZAWCHC 62
(17 May 2017).
[10]
Groenwald
concerned
an opposed application by a plaintiff to amend his particulars of
claim. The issue was whether the proposed amendment
was merely
an amplification of the originally pleaded case unmistakeably
advanced on the basis of the defendant’s alleged
vicarious
liability for the negligent acts or omissions of its employee, as
contended by the plaintiff in that case, or whether
it introduced an
additional claim premised on the direct liability of the defendant
company, as contended by the defendant in that
matter. The
learned judge held that the amendment would introduce a new quite
distinguishable claim premised on the alleged
direct liability of the
defendant. To illustrate the distinction between direct and
vicarious liability Gamble J referred
to the following passage in
Fleming
’s
Law of Torts
(7
th
ed)
at 341:
‘
The
hallmark of vicarious liability, then, is that it is based neither on
any conduct by the defendant himself nor even on a breach
of his own
duty.
Personal liability, in contrast, is
always linked to breach of one's own duty. Certain forms of it,
however, bear a marked resemblance
to vicarious liability: viz, where
the breach is committed, not by what the defendant, but by what
somebody else, has done. There
are several such situations; firstly,
whenever one person orders another to commit a tort, say an assault,
he is liable just as
if he had committed it himself, and it matters
nothing whether it is committed through the instrumentality of a
servant, an agent,
or a fierce dog. Here, truly,
qui
facit per alium facit per se
.
Secondly,
some tort duties are formulated so as to encompass responsibility for
the conduct not only of oneself, but also of certain
people varying
in range. A common carrier, for example, is liable for loss of goods
(saving certain exceptions) even if caused
by strangers; a shipowner
for unseaworthiness even if the defect was due to faulty workmanship
by an independent supplier or repairer.
Most of these are duties of
absolute obligation, but some are mere duties of reasonable care. For
example, the responsibility of
schools to their pupils and of
hospitals to their patients is no longer limited to vicarious
liability for servants, but is complemented
by a "non-delegable
personal" duty to assure that reasonable care is taken for their
safety.’
[2]
[11]
In addition to the examples referred to in
Groenewald
,
there is, of course, also the ‘directing mind’ or ‘alter
ego’ doctrine, whereby the acts of a human individual
are
attributed as to a corporation as being its acts and therefore
conduct for which it is directly responsible. See in this
regard
Consolidated News Agencies v
Mobile Telephone Networks
[2009] ZASCA
130
(29 September 2009);
[2010] 2 All SA 9
(SCA) ;
2010 (3) SA 382
(SCA) at para 29-31 and
Bester NO and
Others v Quintado 120 (Pty) Ltd
[2020]
ZAWCHC 80
(18 August 2020) at para 23-25.
[12]
Our law has thus far followed the approach
enunciated in
Canadian Dredge &
Dock Co v R
19 DLR (4
th
)
314 on the application of the directing mind doctrine, namely that
the acts of the directing mind will be attributed to the company
only
when the action taken by the so-called directing mind (i) was
within the field of the company’s operation assigned
to him or
her, (ii) was not totally a fraud on the company and (iii) was
by design or result partly for the benefit of
the company.
These characteristics should therefore be pleaded if a claim against
a company is founded on the application
of the doctrine. Even
if the aforementioned characteristics have been established, the
question whether the doctrine should
apply depends on the context.
As Heher JA observed in
Consolidated
News Agencies
,
[3]
‘
Each case raises different facts
and the eventual conclusion must depend upon inference and
probability in the absence of express
evidence of adoption of the
statements or conduct as the company’s own
.’
If it is alleged that the doctrine is of application on the facts of
the matter, the relevant context that the plaintiff
claims makes it
so must therefore also appear ex facie the allegations in the
particulars of claim.
[13]
The plaintiff’s particulars of claim
do not contain any allegations identifying the actor who could be
said to be the second
defendant’s directing mind or alter ego.
Nor do they plead any allegations to justify the application of the
directing
mind doctrine. The particulars of claim also do not
contain any allegations that would bring the basis of the second
defendant’s
alleged liability within any of the well-recognised
examples referred to in the quotation from
Fleming
in
Groenewald
.
That begs the question if the claim is not premised on the second
defendant’s vicarious liability for the alleged
delicts of its
employees, then what is the basis for its alleged direct liability?
The answer is that it is not at all clear
what the basis is for the
claim against the second defendant.
[14]
The pleading contains an admixture of
allegations that, in varying degrees, support a number of
possibilities as to what the basis
or bases of the second
respondent’s alleged liability might be. There are hints
(i) that it might be in contract
(but no contract is identified
in the manner contemplated in Uniform
Rule 18)
, (ii) that it may
have a statutory basis (but no statutory provision the breach of
which by the second defendant would give
rise to a claim by the
plaintiff for resultant damage – compare
Patz
v Greene & Co
1907 TS 427
–
is specifically identified
[4]
),
(iii) that it involves a breach of fiduciary duty (without any
basis for the existence of a fiduciary relationship being
disclosed)
and (iv) that it may be founded in delict in the form of damages
occasioned as a result of a fraudulent misrepresentation
(but an
intention to defraud is something that only a human can form, and the
human concerned and the basis upon which the company
should be liable
for his or her misrepresentation are not identified).
[15]
It would not be competent for the plaintiff
to purport to advance its claim on a jumble of causes of action.
If it intended
to advance its claim on the basis of more than one
cause of action, it would have to do so by pleading them in the
alternative
to each other. If the pleader indeed intended to
advance the plaintiff’s claim on all four of the aforesaid
bases in
the alternative, it is not clear from the pleading where the
one ends and the other begins. Furthermore, the makings of a
claim on any of the four possible bases I have identified are
inchoate in each case for at least the reasons I have mentioned in
the observations in parentheses in respect of each of them.
Therefore, at best, the pleading is vague and embarrassing.
[16]
The second ground of exception is
predicated on the second defendant’s identification of the
allegation in para 4.1 of the
particulars of claim (quoted above) to
the effect that the plaintiff ‘
utilised
the services of the second defendant
’
as implying a contractual relationship between the parties.
There are in fact also other indications in the pleading
that a
contract is relied on. There is, for example, the reference in
para 4.1.1 to an account conducted by the plaintiff
with the second
defendant, and the apparent understanding that there had to be a
specific form of authorisation from the plaintiff’s
regional
office to ‘perform any other function other than the supply of
petroleum or petroleum products’ [into the
tanks of the
plaintiff’s vehicles] alleged in para 4.1.6 (also quoted
above). How else could the plaintiff conduct
an account other
than in terms of an agreement? And where could the alleged
obligation on the second defendant to obtain
the specified form of
authorisation originate other than in a contract?
[17]
The complaint is that is that the apparent
reliance on a contract is not clearly spelled out in a manner
compliant with Uniform
Rule 18(4)
(which prescribes that every
pleading shall contain a clear and concise statement of the material
facts upon which the pleader
relies for his claim with sufficient
particularity to enable his opponent to reply thereto) and also that
Uniform
Rule 18(6)
(which prescribes that a party who in his pleading
relies on a contract shall state whether the contract is written or
oral, and
when, where and by whom it was concluded, and if it was
written a copy thereof or of the part thereof relied on in the
pleading
shall be annexed to the pleading).
[18]
A question arose during the argument of the
matter whether the notice of exception was adequately directed at the
causes for complaint
that are readily identifiable in the
pleading.
[5]
[19]
Rule 23(3)
prescribes that when an
exception to any pleading is taken, the grounds upon which the
exception is founded shall be clearly and
concisely stated. In
the current matter the first ground of exception, save for its
allegation that the pleading is vague
and embarrassing, is directed
at a basis for the claim that was not pleaded. It was founded
on the incorrect assumption that
the claim could only be advanced on
the grounds of vicarious liability, which is plainly incorrect.
[20]
Insofar as the first ground of exception
was bolstered by the alternative contention that the pleading was
vague and embarrassing,
no particularity of the vagueness and
embarrassment contended for was provided. That is generally
unacceptable; cf.
Molteno Bros v
South African Railways
1936 AD 408
at
417,
Inkin v Borehole Drillers
1949 (2) SA 366
(A) at 373,
Sydney Clow
& Co Ltd v Munnik and Another
1965
(1) SA 626
(A) at 633G (where Steyn CJ in lamenting an overly
embroidered notice of exception, nevertheless noted ‘(b)
esonderhede
van die gronde waarop die eksepiënt steun, kan ’n goeie
doel dien
’), and
National
Union of South African Students v Meyer; Curtis v Meyer
1973
(1) SA 363
(T) at 368E-F (where Claassens J held that ‘
the
opposing party
[was]
entitled,
in the circumstances of this
case
, to the benefit of the
provisions of
Rule 23
(3) to have had the grounds of the exception
stated clearly and concisely
’).
[6]
[21]
The second ground of exception is directed
at the entire pleading as if the pleaded claim were couched in
contract, whereas, as
I have sought to describe, the claim actually
appears to be advanced on a number of grounds that should have been
pleaded in the
alternative to each other, contract being but only one
of them. As already mentioned, the claim that appears to be
pleaded
in contract is indeed inadequately pleaded for the reasons
identified in the second defendant’s exception; as indeed are
all the other possible grounds on which the claim appears also to be
advanced. The second ground of exception therefore attacks
only
one of the apparent bases on which the claim is pleaded and appears
not to recognise the other discernible bases for it.
I have
some sympathy with the defendant’s position, however, because,
as I have noted, it is difficult to disentangle the
jumble of
allegations in the particulars of claim and to order them in a way
that would clearly differentiate the various bases
(presumably in the
alternative to each other) upon which the plaintiff apparently seeks
to advance its claim.
[22]
In the peculiar circumstances of the
current case, I am therefore disposed to take an accommodating
approach to the second defendant’s
compliance (or
non-compliance, as the case may be) with
rule 23(3).
The
pleading is unmistakeably vague and embarrassing, and very badly so.
To permit the action to proceed towards trial
based on it by
dismissing the exception and requiring the second defendant to plead
to it would only go to compound the embarrassment,
and quite likely
give rise to a confusing or argumentative plea. It would
ultimately conduce to a situation where a case
manager or trial judge
would likely be faced with some difficulty in delimiting the issues
for the purpose of judicially managing
the conduct of the trial.
It is not only the second defendant that would be prejudiced if the
pleading were to stand, but
also the court.
[23]
The situation illustrates the wisdom of the
observation by Sampson J in
Boys v
Piderit
1925 EDL 23
at 25 that the
importance attached to the requirement that a pleading should
sufficiently clearly state the case that the other
side has to meet
is not only for the benefit of the litigants but also the court.
The learned judge said ‘
The cause
of action is for the information of the Court as well as the
defendant and the Court will not entertain a case in which
a
plaintiff does not put forth a cause of action
’.
In my judgment a court would be equally loath to entertain any case
in which the pleading on which it was founded
was as badly vague and
embarrassing as the particulars of claim are in the current matter.
[24]
I should perhaps emphasise that this is not
a case like
Wicksteed v George
1961 (1) SA 626
(FC), where the Federal Court of Rhodesia and
Nyasaland declined on appeal to entertain contentions on an exception
on grounds
that had not been adumbrated in the notice of exception or
advanced in argument in the court of first instance. In this
case,
as I have mentioned, the question of whether the notice of
exception sufficiently covered the defects in the pleading was raised
and debated during argument.
[25]
For all the aforegoing reasons, an order is
made as follows:
1.
The second defendant’s exception to
the plaintiff’s particulars of claim is upheld with costs.
2.
The plaintiff is afforded 15 days within
which to deliver amended particulars of claim.
A.G. BINNS-WARD
Judge
of the High Court
APPEARANCES
Plaintiff
/ Respondent’s counsel:
G.H. Meyer
Plaintiff
/ Respondent’s attorneys:
Fluxmans Inc
Rosebank, Johannesburg
Ward Brink
Cape Town
Second
Defendant / Excipient’s counsel:
C. J. Bosman
Second
Defendant / Excipient’s attorneys:
Nielen Marais Inc
Parow
Vanderspuy Cape Town
Cape Town
[1]
The pleading was drafted by the plaintiff’s
attorney. It was not signed by counsel.
[2]
Quoted by Booysens J in Hirsch Appliance
Specialists v Shield Security Natal (Pty) Ltd
1992 (3) SA 643
(D) at
650D-H.
[3]
In para 31.
[4]
In
Patz v Greene
at p. 433, Solomon J held ‘
Where
a statute prohibits the doing of a particular act affecting the
public, no person has a right of action against another
merely
because he has done the prohibited act. It is incumbent on the party
complaining to allege and prove that the doing of
the act prohibited
has caused him some special damage – some particular injury
beyond that which he may be supposed to
sustain in common with the
rest of the Queen's subjects by an infringement of the law. But
where the act prohibited is obviously
prohibited for the protection
of a particular party, then it is not necessary to allege special
damage.
’
[5]
The notice of exception was drafted by the second
defendant’s attorney. It was not signed by counsel.
[6]
Underlining supplied for emphasis.